Lean manufacturing can change a business, but the focus should be on the people—not the tools.

Paul W. Critchley saw the power of lean as a plant manager at a growing medical device company. As the orders increased, every day the two-person shipping department struggled to make deadlines, getting in at 6:30 a.m. and rushing all day in order to make the UPS truck deadline at 5 p.m. Some days, the UPS driver would wait for them as they finished the last order. And then they’d go home, knowing they had to repeat the whole process the next day.

It was time to do something. The staff couldn’t keep up anymore and the company was in danger of missing shipments. Critchley talked to the shipping manager, Tony, about some inefficiencies in the process. He organized a three-day kaizen event, and they began making changes. They eventually increased output by 50%. Tony told him he’d initially been skeptical, but he was won over completely.

Tech Tips

To address whether your business could benefit from enterprise lean, ask the following questions:

• To address whether your business could benefit from enterprise lean, ask the following questions:
• Do dashboards lead to fire-fighting activities for the same problems? If so, then this is waste.
• Are performance metrics reported from a process point of view so that one can truly determine if a process improvement was effective and by how much? If not, then this is waste.
• Are business scorecards predictively reported and examined collective so that lean improvement efforts can be undertaken and the big picture benefit? If not, then this is waste. 
• Are performance metrics directly linked to the processes that created them so that one can easily identify and improve process performance metrics? If not, then this is waste.

Lean manufacturing can change a culture. It can save money and improve processes, but ideally it should also give people more control over their work. It helps customer service reps avoid angry phone calls, salespeople from having to explain problems, and the shipping department from rushing like mad to complete their work. In short, life gets easier for everyone.

“I think the vast majority of folks would much rather walk in to work and know they have some ownership and control of what they do,” says Critchley, president of New England Lean Consulting. “The golden nugget of lean is to give people that power.”

Lean manufacturing has been around for more than twenty-five years—the book “Lean Thinking” by James Womack and Daniel Jones was published in 1990—so the ideas are not new.

But the scope of lean has expanded and the thinking around it has shifted. Lean has reached beyond the factory floor into hospitals, government, and services. Although the failure rate of lean implementations has been described as 80%, this could be because of the difficulty in sustaining a big change at an organization. It offers tools such as 5S, kaizen events, and just-in-time production, but experts say that the main benefits of lean are the effects it can have on people. It can transform a business but it does take time.

Even though he said he doesn’t really like the term, Critchley said lean really was a journey. There are a few steps to take to ensure your business gets more out of lean and approaches it in the right way.

People First

The right way is to look at it as a culture change. “Companies tend to get hung up on the cost savings aspect of it,” Critchley says. “Lean obviously helps from that perspective. It makes a company more efficient and provides more value to the customer. You stop doing things that they won’t pay for. And you do the things they will pay for better.”

The other pillar, Critchley says, is the respect for people aspect, which can be more difficult.

But sometimes people do get it. Critchley always asks his clients, “What do you want to get out of this?” One of his current clients told him: “Our culture here is not what I want it to be.” The executive explained that he is new to the company, and when he asked for ideas at meetings, he just gets a lot of deer in the headlights looks. But he wanted their ideas and understood that “the people who know the process the best are the people who do it every day,” Critchley says. His thinking is: “If I can get these 15 people engaged, I’m 15 times more effective. That’s the part of lean that some people miss.”

And speaking of executives, they definitely have to be on board from the start. “The companies that we see that are the most successful, not only support it but are actively engaged in it. They see what folks do on the floor every day.

“Lean is about respect for people, and the best way to show that is to spend time together,” Critchley says.

When he was starting out as a young engineer, Critchley walked the shop floor at an automotive plant in South Carolina with the program manager who had grown up at this plant. “This guy was like a rock star,” Critchley says. Not only did he know everyone’s name, he also knew they coached Little League or their granddaughter was in dance class.

“That was probably 17 years ago and I remember it like it was yesterday,” Critchley says. “He could have asked people to do anything and they would have done it.”

This stems from trust. At this same plant, Critchley was exposed to lean for the first time and realized the benefits it offered. “Lean is all about doing the same things differently and smarter and more efficiently.”

In one case, he videotaped a process that usually took five hours. But with a series of small changes and tweaks, they were able to shorten the process considerably.

Mastering the Job and Getting Better

When you think lean, you might think Toyota. Richard D. Rahn, principal at Leonardo Group Americas LLC, has worked with one of their plants in Indiana, and said workers on the factory floor all the way to top management are involved with continuous improvement.

First, they focus on the basics and learning to do the job well. “The idea of continuous improvement doesn’t make sense unless you’ve mastered the work,” says Rahn. “There’s not a lot of initial emphasis on improvement, it’s only after someone has mastered a job that they are in any position to talk about making it better.”

From there, the expectation shifts to improvement. Rahn says from the 1,200 employees they receive about 1,800 suggestions a month. “There’s definitely an expectation you don’t come to work just to work,” Rahn says. “You come to work to think also.”

And these don’t have to be revolutionary, million-dollar ideas. The idea is just to think about changes—and everyone does. “The idea that you can get an entire organization moving in that direction is the impressive thing,” Rahn says. “That’s the reason most organizations haven’t done that—it’s not that easy.”

Toyota doesn’t just focus on continuous improvement but also measurement, Rahn says. In looking at data from this morning instead of last month, they are able to note if things have gone wrong and react more quickly. “With Toyota, it’s not a secret technique, it’s more the execution,” Rahn says.

Other organizations can also offer hacks in getting results with lean. Rahn recalls hearing an aerospace CEO at a conference a few years describing how he had been successful with lean. All of the reports showed the company had done 600 kaizen events and spent millions of dollars on it and lots of training. But when he looked at the financial reports, he couldn’t see results reflected in the numbers.

Only when he asked senior vice presidents to be able to teach lean subjects did he start seeing changes. Once the senior staff understood the ideas enough to teach them, things got better. As Rahn explains, previously, they weren’t able to fully support the concepts because they didn’t understand them.

Improvement with a Plan

When deciding what to focus on, Jim Huntzinger, president and founder of Lean Frontiers, says companies should consider the overall strategic goals and make sure they line up with their efforts.

“It’s a lifetime journey for the organization,” says Huntzinger. “It’s a business model, not just tools and practices. It affects every aspect from your business.”

Although it is an ongoing venture, you still need a plan in place, he says. Still, he says most organizations just pick one particular aspect of the company, like manufacturing, without considering other elements like the supply chain or sales and marketing. Thinking big picture is a better approach.

What Not to Do

If done well, lean should reduce waste at the operational level, but also on a larger, enterprise level, says Forrest W. Breyfogle III, CEO of Smarter Solutions Inc. Breyfogle explained how many companies just don’t implement lean the right way: “Consider a conversation that I had with a lean practitioner. This person told me about all the organizational work that he had done in lean. I then asked him: didn’t you get laid off from this company? He said yes. I then said: wasn’t your past employer bought by a competitor because of its poor business performance. He said yes. Well, I then asked, what was the real benefit of all your good lean efforts, since your employer was not financially successful and you lost your job? He did not have an answer for this question.”